Four months on imports of grain and improves will be completely exempted from the duty of 18 percent, what is the tariff for imports from EU countries.
At the request of the flour and confectionery producers, who claim that there is not enough quality grain in our market, the Serbian government has approved duty-free imports of mercantile wheat. As we learn, the regulation, which will remain in force until April 30, does not provide for quotas for the import of improves and quality wheat that are likely to be sourced from Croatia and Hungary by the domestic industry.
Some representatives of the bakery industry and candy makers have already declared that they have enough supplies for now, and that they will decide to import only if it is profitable for them or quality raw materials are not available on the domestic market. However, according to unofficial information, some of the biggest manufacturers are eagerly anticipating this move by the state. Especially confectioners who had problems with exports due to poor quality raw materials.
– It was estimated that there might not be good quality wheat, so the state passed this decree. For four months, imports will be completely exempted from the duty of 18 percent, what is the tariff for imports from EU countries – Zdravko Sajatovic, director of Zitounia, told Politika. He stressed that quality wheat is more expensive, so he doesn’t think producers will “scramble to buy it”. Probably only the largest, who have a market. He does not believe it will be some large quantities.
– It is important that they have a choice and this is called a market economy. The rest is demagogy, to say that we have produced 2.5 million tonnes and we are importing wheat. I do not believe that more than 1.5 percent of total domestic wheat production will be introduced. Who will endanger it? And it will help the exporters – says Sajatovic.
A similar initiative was launched in September 2018 by Zitouniа, which brings together industrial mills, bakeries and pasta factories, whose members are the predominant exporters of flour and pasta. The government was then asked to temporarily authorize duty-free imports of mercantile wheat-improves. Due to bad weather that year, large quantities of wheat were sold on the domestic market as livestock because they were of poor quality.
Although this request was not accepted at the time, the intention of the millers was to import about 40,000 tonnes of wheat from Hungary and, by mixing it with the domestic, improve the quality of dedicated flour for export as well as for the production of fine pastry. At that step, they said, they were forced “so as not to lose the export of domestic purpose flour to the surrounding countries”.
This proposal was opposed by some of the professionals in the field, saying that the state should not waive customs duties to satisfy the producer and exporter group, but that it should take measures to sow good quality certified grain in Serbia.
– Time has shown that, unfortunately, we were right – says Sajatovic, commenting that such an initiative from 2018 has not been accepted and adds: – Bosnian mills have largely thrown us out of business. Dedicated flour for the production of burek or bark is around 100 euros per ton more expensive than the type 500. Without the highest quality wheat, you cannot produce or export it. Bosnia’s millers have been importing quality wheat and improves all the time, duty-free, mostly from Hungary, and today they have better flour than we do.
According to information from Zitounia, three years ago, Serbian flour exports were at a record 256,000 tonnes, and in 2019 they fell to 144,000 tonnes. Most of our losses were due to the impossibility of placing flour in Kosovo (introduction of taxes), but partly due to lower exports to other surrounding markets. Serbia currently exports most flour to North Macedonia, Montenegro and BiH.
– Importing quality wheat will not endanger domestic farmers or affect the rise in the price of dedicated flour.
I think the Ministry of Agriculture made a realistic assessment this time. Customs duties will be returned in May, which is a pretty decent deadline for preparing for the receipt of goods from the new harvest – says Zdravko Sajatovic for Politika.